Market Studies

The four week streak of falling mortgage rates ended this week, according to surveys released Thursday by Freddie Mac and Bankrate. However, despite this slight increase, mortgage rates remain relatively stable and are notably lower than rates this time last year.

Home loan delinquency rates in the United States have now surpassed 10 percent, Lender Processing Services (LPS) reported this week. When you factor in homes already in the foreclosure process, the total rate of noncurrent mortgages sits at 13.3 percent, according to the company's national loan-level database. This rate indicates that more than 7.2 million mortgage loans are now behind on payments, LPS explained, with another one million properties already taken back by banks and in REO status.

The slew of mergers and acquisitions (M&A) in the mortgage industry last year launched a trend that will accelerate in 2010 and 2011, according to recent predictions by the investment bank Berkery Noyes. Lenders, vendors, and servicers will continue to embrace tactical acquisitions to shore up product lines, capture customers, increase market share, and ensure they are prepared for the next wave of forward moving originations, Berkery Noyes said.

For the week ending January 29, 2010, mortgage rates inched down further and mortgage applications continued to increase, according to the Weekly Mortgage Applications Survey released Wednesday by the Mortgage Bankers Association (MBA). The Market Composite Index, a measure of mortgage loan application volume, jumped 21 percent on a seasonally adjusted basis from the prior week.

Overdue loans in pools of commercial mortgage-backed securities (CMBS) climbed to 6.49 percent in January, according to a report issued this week by Trepp LLC, a New York-based company that tracks the commercial real estate market. That figure is up 42 basis points from the 6.07 percent delinquency rate in December, and Trepp says it's the highest delinquency level in the history of the CMBS industry.

Contrary to popular belief, the Mortgage Bankers Association (MBA) says financing for new commercial and multifamily mortgages is on the rise. According to a quarterly survey released by MBA Tuesday at its Commercial Real Estate Finance convention in Las Vegas, commercial and multifamily mortgage loan originations were 12 percent higher in the fourth quarter of 2009 than during the same period last year, and 15 percent higher than the third quarter of 2009.

Most large banks have stopped tightening standards on a number of loan types, according to a new report from the Federal Reserve. But the central bank's latest loan officer survey says that while it may not be getting tougher for consumers to borrow, it's not getting any easier yet either because financial institutions have yet to unwind the considerable contraction that has built up over the past two years. Still, the pause in the stiffening might be seen as a hopeful sign for a financing world that's been strained since 2007.

Following a market swing driven by response to the homebuyer tax credit, pending home sales in December have leveled off, according to a report Tuesday by the National Association of Realtors (NAR). In November, the Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed during the month, dropped 16.4 percent after surging in preceding months before expiration of the original tax credit. After the credit was extended, the PHSI gained 1 percent in December, and NAR says it's a sign of stabilization.

A group of properties located in Montgomery County, Pennsylvania valued at almost $3.4 million were sold for less than a third of their value at the September 2009 annual upset tax sale. According to a recent report by the Real Estate Tax Sale Law Network, Inc. (RETSL), a servicer who connects lenders and property owners with legal experts who know the intricacies of real estate tax sale law, the properties sold for a total of $1,066,394, equaling only 31 percent of their value.

The Federal Housing Finance Agency (FHFA) recently released its monthly Foreclosure Prevention Report, which summarizes loss mitigation activity for Fannie Mae and Freddie Mac. Under the administration's Home Affordable Modification Program (HAMP), the GSEs have initiated 43,000 permanent modifications and 442,500 active trials. FHFA also reported that in 2009, the two companies refinanced more than 4 million loans for struggling homeowners.